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Yesterday, Linden Lab's interim CEO Philip Rosedale and CFO/COO Bob Komin did a talk and Q&A session in Second Life focused on where things were at, and where things were going. This week, on The Virtual Whirl, we're going to take a look at that session and see if some sense can't be made of it all.

The user interfaces for general-purpose virtual environments get a pretty bad rap. It's not surprising, actually. They've generally been pretty awful. Not that they are actually hard to learn, but they've been far from comfortable to use.

That's not really very surprising. Those virtual environments don't really fit any of the accreted body of knowledge of user-interaction models, and building comfortable user-interfaces is no easy task.

Virtual environments have a generally poor reputation in many quarters, particularly in the mass-media. Much of that reputation is ill-deserved, and some of it is entirely fabricated (eg: by the mass-media).

This week, we cover the final installment of our summarized history of Second Lifeand Linden Lab (check out the first installment or the second, if you missed them). It's only possible to cover a tiny fraction of the events that took place in the space we have here, but the highlights paint an interesting picture.

We'll be working our way from 2008 to June 2010, and looking at what future directions we expect from there.

Kathleen Craig, the Lab's Communications Manager disappeared in mid-conversation with us over an upcoming press-release. We learned later that she had left the company after less than a year, though the circumstances were unclear. The press-release involved the Lab's acquisition of web-based virtual goods markets, OnRez and Xstreet SL. OnRez (the more appealing of the two) was subsequently terminated.

In August, Linden Lab published what we'll very generously call a roadmap (in that it fails to provide the basics for a technology or policy roadmap) for content-management and intellectual property, an extremely divisive document, and apparently now a dead one. A few bits made it in one form or another, but there's no sign that the remaining portions are in the works.

In October, after a very long time promoting a Second Life educational wiki, Linden Lab slapped it with a cease-and-desist, forcing it to close down its domain name, and then promoting the defunct domain name to customers for a couple more months. More than one education community distanced themselves from Second Life and Linden Lab before the end of the year. Laying this sort of smack down on prominent users and supporters was becoming an ugly habit.

The Lab changed Xstreet's fee structure and policies, upsetting many in the process and driving them to competitors. After losing a lot of vendors over this in 2009, the Lab would eventually reverse most of these changes in 2010.

Some time after the campaign, we spoke to Linden Lab about the effectiveness of it. A Lab spokesperson indicated that the Lab had not taken any action whatsoever in response to the campaign, and did not acknowledge that the Lab had any knowledge or awareness of the "Step UP!" campaign.

Technology

January was the month that the reliable inventory service was supposed to have been rolled out, to help improve user-experience and minimize both inventory loss and the appearance of inventory loss. A year later, and that has not yet eventuated.

Instead, the Lab started the year by explaining that various metrics that had suddenly ceased publication without notice were "misleading." Within several weeks, publication of the figures resumed, and we were told instead that it had been a bug. During that patch, Linden Lab dumped about 800,000 inactive accounts which had been created but never used as a part of a long-delayed cleanup.

So far this year, the Lab's been uncharacteristically quiet. Oh, there are video tutorials and hints and tips and so forth, but most of it has been top-down or just fluff, with very little in the way of conversations happening with markets and users. That said, it has been an interesting year already.

Yes, we're attributing it to conceptual error. The alternative would be to suggest that Linden Lab was more aware of the true measurements of the Second Life economy and simply lied through 2009/10 by using a metric that was intended to make things look better than they were - and that's not a very nice suggestion. The reductions in growth were apparently obvious to virtually everyone else. Most cases of apparent dishonesty can easily be explained with simple shortsightedness, obstinacy or error, and we think that is also the case here.

Amsterdam, the new EU marketing office for Linden Lab (which opened at the beginning of this year) apparently will be remaining open indefinitely, and is the only non-US office to be retained.

All of this was attributed to "a restructure" and that efforts would be directed towards a viewer that would run in a web-browser, thus hiding the download from potential users. Given the Lab's established track-record on projects, that should be ready around Q1 2012, unless there are unusual delays.

Two new lawsuits started up, which (if I'm counting correctly) brings the total to four current lawsuits against Linden Lab by its users. The new ones are Evans vs Linden Lab, and Fahy vs Linden Lab.

The WSE (World Stock Exchange) that had closed for one month of upgrades at the beginning of 2008, opened back up for business this year after two years, which surprised everyone who noticed. As a part of reopening, the WSE announced a permanent trading halt on all WSE-listed companies.

Linden Lab launched Viewer 2 (AKA Second Life 2) and a new orientation experience at the end of March this year, and we're going to say that it flopped.

No, there's nothing specific wrong with Viewer 2 (although the new orientation experience is too video-heavy for many to find it usable), but that's the point that usage metrics begin a sudden decline.

It is unlikely that these are not related (although perhaps we're committing a post hoc fallacy of our own), although the failure of Second Life's search system to allow you to actually find things is probably a contributing factor - along with the new Terms of Service.

After some reflection, renaming "Find" to "Search" was probably very appropriate. Since the renaming, you seem to do a whole lot more searching than finding.

The Future

There's the short history, sans the hundreds (well, actually thousands) of things that I've skipped over or not included because there is simply too much. There's enough to fill a book, or several. In fact, some of it already has, and if you want a fuller treatment of those early years James Wagner Au's book is probably the best place to start.

So, where is Second Life and Linden Lab going?

Overall, we're expecting the total staff reduction (including voluntary departures) to reach maybe 50 or 60% before the end of 2010.

For layoffs of more than 15-20% it's customary for the point-man (or woman) of the layoffs to be let go as well. It's a cats-paw thing. Removing the point-man allows remaining staff and customers to focus ill-feeling on the unlucky sod, and allows things to continue without so much negativity.

The Lab has always been secretive about its goals and plans, but as a part of announcing layoffs has indicated that it's planning to be more "consumer focused" in future.

Quite what that actually means is unclear. It certainly implies that the Lab wasn't before, and a large part of Second Life's history seems to bear that out, if we're judging the Lab by its actions rather than by its words.

You see, every year the Lab tells us that it is focused (or about to focus) on the consumer, that it is making an effort to simplify things, to improve stability and reliability and all of that. Rosedale said it at the anniversary speeches just a couple weeks ago. Kingdon said it every year he was in the CEO's chair, and Rosedale said it every year previously.

We don't think, therefore, that it's cynical to assume that what we're being told is so much hot air. It's pragmatism born of experience.

Talk is cheap, and Rosedale himself said to judge the Lab by its actions rather than its words. The problem is that the Lab takes a long time to accomplish things, so any visible actions are probably quite a ways off.

We also don't expect Rosedale to actually be involved much in the running of the Lab, interim CEO or not. Most of that will probably fall to the new COO. Rosedale might still be in love with Second Life, but we don't really think he has much interest in Linden Lab anymore.

The Lab must have a CEO, but there's no requirement for him to actually show up for work, or keep the chair warm, and we're really not expecting him to.

What it does do is give the Lab a bit of breathing space, and some much-needed warm fuzzy feelings to tide it over. Very soon, though, the Lab is going to have to show results, or it will lose any confidence that it gained by Rosedale's temporary appointment. Plus, it will need an actual full-time CEO.

So, overall, we're not really predicting or expecting anything to change noticeably in the way Linden Lab operates Second Life. We'd love to be proven wrong here. We're holding out hopes that we will, but we're just not expecting it.

Finally, what does any company in Linden Lab's present position normally do? They generally make new acquisitions, and some sort of new acquisition is what we're expecting to see before the next anniversary. Beyond that, it is hard to say. The Lab is still keeping its goals and directions a secret.

Service-based viewers for Second Lifeare a little different to the standard kind of viewer software that users might be used to. Standard viewers are downloaded to your PC, run on them and talk directly to the servers. Service-based viewers (also sometimes referred to as 'cloud-based') are either running on a remote server through a web interface, or running on a cloud (or other remote system) and sending data and graphics to a thin client that you run locally. The ill-fated Vollee client was one such example, and Comverse is another.

Most Some of the (relatively few) extant viewers for mobile devices (iPhones, iPads, et al), and web-based Second Lifeviewers like AJAX Life are service-based viewers (as are a number in development), and Linden Lab seems bent on closing them down.

This week, we cover the second installment of our summarized history of Second Lifeand Linden Lab (or check out part one, if you missed it). From 2005, there's an impossible amount of material to cover, but there are some interesting stories lurking among it all.

Join us as we work our way through some of the interesting highlights from 2005, 2006 and 2007.

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ailin-graefanshe-chungblack-septemberbrazilbugsbusiness-modelsbusiness-weekcultureeconomyFBIfeaturedgamblingginko-financialgomgriefersgriefinghistorylegallinden-dollarslinden-labmmo-industrynipplegateopinionquicktimesao-paulosecond-lifesllaterrorismthe-virtual-whirltrademarkuigeavirtual-worldsworld-stock-exchangeSat, 03 Jul 2010 12:00:00 -0400319|19527189http://massively.joystiq.com/2010/07/03/the-virtual-whirl-a-brief-history-of-second-life-2006/?utm_medium=feed&utm_source=Feed_Classic&utm_campaign=Massively&ncid=rss_semi
http://massively.joystiq.com/2010/07/03/the-virtual-whirl-a-brief-history-of-second-life-2006/http://massively.joystiq.com/2010/07/03/the-virtual-whirl-a-brief-history-of-second-life-2006/?utm_source=Feed_Classic&utm_medium=feed&utm_campaign=Massively#comments2006: More gold rushes, less griefing and the Second Life Liberation Army

Texture loading issues from the 1.7 update continued along with doom and gloom over point-to-point teleportation. To add to the rocky feeling of things, version 1.9 caused widespread instant-messaging failures. Come the first of April, wearing an all-grey set of textures was a popular jape.

Seven days later, we ourselves started the excellent Second Life Insider. Coincidence or a tawdry cashing in on the rush? Actually, we honestly can't remember which it was that we had in mind at the time. But it takes a lot longer than that to get one of our new websites live, so it must have already been in the works well before the Business Week cover story.

Second Life Insider became Massively in November of 2007.

As a part of the rush that built through May and June, several large groups of new users came from the *chan communities, but never seemed to get beyond small scale goo attacks, cage-guns, flying penises and annoying noises. It was all schoolyard stuff that didn't end up posing any widespread inconvenience, unless you were one of a small number of particularly outspoken and well-known users who were routinely griefed.

What's more effective than actual griefing, though? Faked griefing, for a profit. A small corporate intelligence firm set up a group called the Second Life Liberation Army and created a series of faked videos of griefing, using a few friends or alts to simulate victims in acts of terror at American Apparel and other locations.

Press releases were written, democracy for Second Life was demanded and strong anti-corporate sentiments were espoused. People ate it up, especially the mainstream media, who don't know any better, didn't do their research and were completely gulled.

The SLLA used media manipulation to attract a following of disaffected, anti-corporate activists who were then used to spy on corporate activities within Second Life, which was then supposedly converted into saleable corporate intelligence by the shadowy firm behind the group.

Ultimately, however, group members saw through the ruse, the group cut loose from its corporate master, and after promising big things, sank into complete obscurity. While not directly heard of again, the mainstream media continues to recycle its old press-releases and fictitious exploits as if they were true, and as if the attacks had actually occurred. A genuine paper tiger.

Most of the false scares about terrorism and terrorists in Second Life can be traced back to those press-releases that fooled the newspapers, and are now broadly accepted as truth.

Black September

In September (known to many who were affected at the time as "Black September") an unpatched exploit in a piece of software used by Linden Lab allowed parties unknown to access customer information for many Second Life users, including real names, contact information, and passwords. There were reports that an encrypted block of payment information was also obtained by the intruder, and many users canceled their credit-cards and obtained replacements just in case.

All passwords were reset about two days later (just as everyone was starting to breathe a little easier) and many users had trouble obtaining valid login credentials afterwards.

By 2007, a pattern was beginning to emerge. While Linden Lab was lax (some might say excessively lax) in various forms of enforcement, the Lab wound up closely scrutinizing exhibits at the anniversary and Burning Life events from 2007 on. Frictions between artistic expectations and enforcement actualities caused users and the Lab to increasingly square off as opponents at these events, taking strongly adversarial positions.

This trend has continued through 2010, and is commonly referred to as "nipplegate" among users and bloggers. Linden Lab also decided this year that June would be called Second Life's Birthday, rather than the Anniversary, a trend which continued thereafter, despite previous assertions that June was the Anniversary and that the Birthday was in March.

Early in 2007, Linden Lab invited the USA Federal Bureau of Investigation (FBI) to view content and activities in Second Life, particularly those items that Linden Lab found to be "questionable" in nature. The FBI investigators did not indicate that there were any "areas of concern" in the content or activities that they examined.

The US UIGEA bill had a bit of a rocky history, and in 2009 was put on hold, and then sent to the House Financial Services Committee, where it now appears to be dead for all intents and purposes.

Banks and pyramids

Ginko Financial was an apparent Ponzi scheme offering too-good-to-be-true rates of interest, operating out of Sao Paulo, Brazil - where it would have been in violation of Brazil's banking regulations. During 2007, the operation folded up along with an estimated 750 thousand US Dollars in user's funds.

Around the same time a number of similar unlicensed banking operations in Second Lifewere hacked due to poor security and large sums of money taken, though the sums paled in comparison to the Ginko losses.

The Lab trademarked "Your World, Your Way" and began eliminating all traces of the old "Your World, Your Imagination" slogan from its websites and materials. The new trademarked slogan, however, seems to have seen barely any use at all. That might be because the new slogan was already in use for IBM's Websphere Portal (as well as by innumerable travel agents).

In the middle of the year, Linden Lab said it was shifting to an increased consumer focus, with goals of simplifying the user interface and experience, fixing bugs and stabilizing the platform. It was a familiar message, having been recited in previous years, but this time a number of feature-development projects were axed, and staff associated with them were let go.

The last time we saw any statistical data on overall awareness of intellectual property issues, it seemed that awareness of copyright and trademarks was quite appallingly low - and actual accurate knowledge about them was a very rare thing indeed.

Surprisingly few people seem to know their way around the don't-do basics, and with record numbers of trademarks being registered in recent years, it is actually nice to see that some online operators have got a firm grip on things this year.

Honestly, if you tossed a press release on our collective desk touting your virtual environment or MMOG having items or outfits available in support of the 2010 FIFA World Cup South Africa[TM] ... well, it'd probably cause an avalanche of pizza boxes ... but after we got the mess cleared, we'd probably assume that your promotional stuff was littered with unlicensed FIFA trademarks. It's happened before.

Second Life has just seen its seventh anniversary (called its seventh birthday, only it technically isn't -- the original birthday is in March, but the anniversary is in June. There's history there). It's also traditionally a time when Linden Lab and Second Life users most often treat each other as enemies and obstacles; and it is a time for retrospectives and for considering the future.

With the departure of Linden Lab CEO Mark Kingdon (the press release release says "stepping down," but the day prior to the release many Linden staffers were saying that Kingdon was fired) Linden Lab has hit a turning point -- or the end of another era.

Accordingly, over the next couple of weeks, we're going to look at the history of Second Life, starting back in 1999 and continuing to the present day. Or at least as much as we can cover the ten-year history of something so rich and diverse in the available space.
Second Life is quite legitimately a phenomenon (and even won an Emmy award). It was also something of an accident, since it wasn't what Linden Lab started out to make.

In November 2002, closed beta testing of the newly dubbed Second Life began, and open beta followed in April 2003. The user interface was primarily green in color.

Second Life initially suffered from a tragedy of the commons, so a rudimentary economic system was put in place, initially focused on flat, scaled fees to place objects in-world (not at all unlike the pennies system used in MUSH and MUCK predecessors to control resource utilization), and later followed by a more complex system of taxes.

In October 2003, Second Life 1.1 was released with measures to stifle tax-evasion, and Americana was doomed. With this release, though, came a vehicle API, new terrain textures, animated hair and clothes, bumpmapping, and shininess, all of which served to energize content creation in new ways.

The 1.2 release in December 2003 was the big landmark, bigger perhaps than Second Life going into production on June 23rd that year. The tax system was completely abandoned and replaced with a land-ownership model. Land was taxed in either L$ or USD. Scripters were able to create dialog boxes, and the user interface changed color to blue.

There was a tremendous outcry about the new blue color of the user interface, and quite a bit more about the new economic system, which you might recognize as the modern Second Life economy (barring a few adjustments). Many averred that these changes would spell the death of Second Life within months.

2003 also marked a period of severe financial trouble for Linden Lab and a mass layoff of staff. The company struggled to keep operating and offered a lifetime charter membership to raise funds. Charter members received a Linden dollar stipend and the ability to own 4,096 square meters of virtual land forever at no further charge.

Charter members paid US$160 or more. There were enough charter members to keep the company afloat until the financial situation improved.

2003 was the year that Linden Lab adopted the slogan "Your World, Your Imagination" until the deprecation and removal of the slogan in 2007.

In 2004, versions 1.3, 1.4 and 1.5 brought a slew of new features and enhancements: new group tools and abilities, expanded estate controls, new prim shapes and settings, audio streaming on parcels, custom animations, XML-RPC communication with scripted objects from outside Second Life and more.

Version 1.5 was slated as a bug-fix release, but ironically it was perhaps the buggiest version of Second Life to date.

Tringo

In December 2004, Nathan Keir (aka Kermitt Quirk) created Tringo -- a blend of Tetris and Bingo -- that could be played by a large number of players at once, and often involved wagering and cash-payouts.

Tringo was later licensed for the web, the PC, and for the Game Boy Advance.

Overall, a pattern generally started to emerge this year. When we considered Linden Lab projects from conception to production, a timeline of 14-18 months seemed about normal. This overall timeline held true through subsequent years.

2004 is still regarded by some as being something of a Golden Age for Second Life content creation and communities, but in practical terms the scale was very small compared to the levels that it reached just two years later.

2004 may not have been that big a year for Second Life and Linden Lab (though it was certainly a big year for bugs!), but 2005 was something special. Tune in next week for more!

Staff have been dropped from market-development, business development, engineering, quality assurance, human resources, community and executive management. Hardest hit this week are community and customer-advocacy roles and quality-assurance/testing.

What isn't hard to see is why these cuts were made, and in fact, why they are vital to Linden Lab as a going concern. At least it isn't hard to see when you're looking in the right place.

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business-modelsdaryl-chineconomyfeaturedlayoffslinden-dollarslinden-labopinionsecond-lifesupply-lindenthe-straits-timesthe-virtual-whirltyche-shepherdvirtual-worldsSat, 12 Jun 2010 12:00:00 -0400319|19511190http://massively.joystiq.com/2010/06/07/linden-lab-laying-off-staff-closing-singapore-office/?utm_medium=feed&utm_source=Feed_Classic&utm_campaign=Massively&ncid=rss_semi
http://massively.joystiq.com/2010/06/07/linden-lab-laying-off-staff-closing-singapore-office/http://massively.joystiq.com/2010/06/07/linden-lab-laying-off-staff-closing-singapore-office/?utm_source=Feed_Classic&utm_medium=feed&utm_campaign=Massively#commentsBack in April, we observed the departure of what we estimate to be approximately 5% or so of Linden Lab's total headcount. Some churn is to be expected, of course, especially in a tech company. It seemed a little odd that the positions didn't appear to have been advertised or refilled, but sometimes that happens out of sight. Last week, a Lab spokesperson confirmed for us that the Lab still had in excess of 300 staff.

This week, however, we're actually becoming quite concerned as there are signs of what seems to be a significant series of layoffs in progress at Linden Lab.

It has long been a matter of considerable debate among virtual-environment pundits about what constitutes an 'active user'. In some ways, subscription MMOGs have it a lot easier than many other kinds of virtual environment. You can always count paying subscribers, and that's all that matters.

In a general-purpose virtual environment, free-to-play or 'freemium' model, though, counting active users is important. Trends in active users measure the health of your user communities, as well as allowing you to credibly measure your virtual-world's e-peen compared to that of the competition.

The Tech Virtual (which has been open now since 2008) acts as a center for the creation of reusable (and frequently interactive) science and innovation based concepts and exhibits, and offers US$ design prizes for exhibits which demonstrate fundamental principles in a variety of areas. Even the museum design itself is a collaborative effort, and the museum is providing prototypes for the construction of physical museum spaces.

In just a few more days, the winner of the second annual Linden Prize is going to be revealed, and the ten finalists have been announced. The stated criteria for the Linden prize are projects that "[elevate] the human condition through using Second Life," and "that improve the way people work, learn, and communicate in their daily lives outside of the virtual world."

Therefore, I feel it only natural that I was rather astonished to see sionChicken/sionCorn in among the finalists, since it apparently does neither of these things.

Virtual environments evince a significant lack of mainstream adoption. Relatively tiny percentages of the world population are involved in them in any way online. There's something clearly missing.

At the present time, virtual environments simply lack any compelling reason to exist that motivates mainstream users and might drive mainstream adoption. There's no killer app, or secret sauce that gets large numbers of people thinking "I want to get me some of that!"

Second Lifeis an immersive virtual environment. That is, it fosters attention and a quality of focus. You might subscribe to alternative definitions of the word "immersion", but focus and attention are the sense being used when developer/operators talk about an "immersive environment". They might intend one of the other meanings at other times - the word is a pretty slippery one.

The problem is that for most general-purpose virtual environments (eg: Second Life), that immersivity - that quality of attention and focus - kicks in pretty late. Only after you understand the basics of the context in which your actions, activities and experiences are taking place, do you have the satisfying sort of immersion that comes so easily to flat spaces like the Web and Facebook.

A change is as good as a holiday, they say. Seriously, I don't actually know anyone who says this other than myself; though I'm assured that there are some folks out there who do.

With that tragically underutilized platitude in mind, then, last week I posed a question to a spread of well-known virtual environment users (at least to those that I felt would actually respond) and collected the responses.

The question put to the respondents was "What's the single thing that the operators/developers could do to make you feel more satisfied with their virtual environment offering; what thing would help an operator keep you as a customer, or that would make some other operator more appealing than the one or ones you already have?"

"Nothing is certain but death and taxes"; a rather sardonic and bleak proverb, quoted and paraphrased by a number of famous figures over the years. The earliest on record was Daniel Defoe, in The Political History of the Devil in 1726.

Well, this week the death part doesn't concern us so much as the taxes.

Many Americans have spent this month scrambling to get their taxes filed, and for many of the rest of us our own turn comes due in just a couple of months. With that in mind, I thought I'd talk about the taxation status of virtual assets.